VanEck Switzerland AG

Video Games & Esports: The MVPs of Quarantine

The vast majority of business around the world are facing extreme uncertainty, as consumers are forced to stay at home, avoid contact with other people, and essentially wait for the viral panic to blow over. As people stay at home for extended amounts of time, more and more are turning to video games and esports as a means to entertain themselves.

Video Game Stocks Have Weathered the Storm

While it may seem counter-intuitive that a basket of communication services and technology stocks outperform during a de-risking selloff, that’s exactly what has happened over the last few weeks. While this should not be misinterpreted as guarantee for future results, on both a year-to-date basis and from the market top, video game stocks have outperformed broad equity benchmarks by a wide margin. How could this be?

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